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Cummins plans $30M division headquarters at Market Square Arena site

John Tuohy and Jeff Swiatek
8:07 a.m. EDT March 28, 2014

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Deron Kintner (left) with Indianapolis government and Jon Mills with Cummins talk March 26, 2014, about a major project that the business plans for the vacant Market Square site.(Photo: Robert Scheer/The Star)Buy Photo

Columbus-based engine-maker Cummins Inc. on Wednesday announced plans to build a division headquarters at the former site of Market Square Arena, providing the final development piece on the long vacant property.

The company has agreed to invest $30 million to construct a global distribution business headquarters for 400 employees on Alabama Street, between Market and Washington streets.

About 100 office workers and executives will come from two other satellite Downtown offices and about 125 to 150 will be transferred from Columbus, home of Cummins global headquarters. The company plans to add about 150 more jobs at the site over the next several years in the communications, legal, information technology and security departments, said spokesman Jon Mills.

"They will be high-paying jobs," Mills said, though he couldn't provide an average wage.

Cummins president of distribution, Pamela Carter, will have an office in the building and several executives already split their time between offices in Indianapolis and Columbus. They include Chairman and Chief Executive Officer Tom Linebarger, Chief Administrative Officer Marya Rose and Cummins Foundation President Mark Levett.

Mills said the new building will allow key Cummins employees to work in the same office building and have easy access to Indianapolis International Airport.

Construction is expected to begin this year, with the new building opening by late 2016.

Cummins officials said they considered several other cities in Indiana for the new office before settling on Indianapolis. Mills said the tax incentive was "very important" in their decision." Deron Kintner, the city's deputy mayor for economic development, said the tax breaks and free land were "vital" to the deal, noting that two other development proposals for the site had fallen through.

"We had two strikes against us already, this was a grand slam," he said.

The size and shape of the building has not been decided, but it will include room for ground-floor retail outlets, a parking garage, ample greenspace and a design consistent with the company's commitment to significant architecture, Mills said.

The Cummins Foundation's architecture program has commissioned works by notable architects since 1954. That has made Columbus world-renowned for its architecture, with more than 60 architecturally significant buildings, including the Miller House and Garden, the home of long-time Cummins chairman J. Irwin Miller which is now owned by the Indianapolis Museum of Art.

For Indianapolis, the Cummins building will help fill an unsightly gap left in the Downtown landscape by demolition of Market Square Arena. The former home of the Indiana Pacers — across the street from the City-County Building and City Market — was razed in 2001 and the space has been used as massive parking lots ever since.

The new office building will be immediately to the south of a recently approved 28-story apartment tower, also on the MSA site. The tower, by Flaherty & Collins, will have 300 units, retail on the first floor and its own parking garage. The developments are the latest in a building boom Downtown that Mayor Greg Ballard sees as integral to an economic renaissance in Center Township.

"For over a decade people in Indy wondered when the former Market Square Arena site would become more than just parking lots," Ballard said Tuesday. "Now, they know. In the past few months we have announced plans to transform those lots into vibrant places to live and work, put them on the property tax rolls, change the city skyline, and expand the presence of a Fortune 500 company Downtown."

It took the removal of interstate ramps to Market Street in 2006 to clear the area around the Market Square site for new development, and it has gone from largely neglected to upscale residential. A former abandoned Bank One operations center just to the east has become the 258-unit Artistry apartment complex. Developer Milhaus Development also plans two other apartment buildings at that site.

To the north are town homes and apartments developed starting in the late 1990s and further east is the Downtown campus of Harrison College. To the west, the city plans to build a $20 million Downtown public transportation center at 201 E. Washington St.

Flaherty & Collins Vice President Jim Crossin called the coming of Cummins to the MSA block "very exciting."

"We would welcome Cummins as a neighbor," said Crossin. "Having a Fortune 500 company adjacent to our project…is just a great addition and more positive news for Downtown Indianapolis."

Depending on the size of the Cummins building, however, it might fall short of maximizing the development potential of so prominent a site, said Bill Ehret, president of Summit Realty Group.

"I think a much bigger project could be done on that site" than an office building of several stories, Ehret said.

While the city issued a $23 million bond to help finance the Flaherty & Collins apartment tower, no bond is proposed for Cummins, said Deron Kintner, the city's deputy mayor for economic development.

Instead the city is offering a 10-year property tax abatement of 70 percent and will give Cummins the half the land, valued at $5 million. Cummins will buy the other half from the Circle Area Community Development Corp., a municipal corporation, for $4.3 million. The city gave Flaherty & Collins its land, valued at $5.6 million, so it could build its $81 million tower.

Indianapolis will also spend $3.3 million to improve pipes, sewers, curbs and sidewalks at the property.

The project would need approval from several city agencies, committees and ultimately, the City-County Council.

Call Star reporter John Tuohy at 444-6418 and follow on Twitter @john_tuohy.